“Your Way Home Arizona” –Tips for Helping Your Clients Purchase a Foreclosure Home in Phoenix, AZ

All of us are aware of the overwhelming abundance of bank-owned properties flooding the Phoenix area housing market. The Arizona Department of Housing (ADOH) has developed a new program to help your clients purchase foreclosed properties in Arizona. The "Your Way Home AZ" program offers a forgivable, zero-percent-interest loan of 22% of the home's purchase price to qualified borrowers purchasing an eligible foreclosed home. This significantly increases your clients' purchasing power, since eligible borrowers only need to qualify for 75% of the purchase price. The program is currently available throughout all of Arizona.

It is advantageous for you as Realtors to be aware of the program requirements, as well as the unique benefits available to their clients. Click Here for a detailed listing of eligibility requirements for borrowers and properties, as well as financing terms and guidelines.

When working with clients that are interested in utilizing this program, there are a few additional steps that need to be taken throughout the purchase process. Initially the buyer will need to be pre-qualified by a lender as usual. The buyer would need to obtain from the lender a few items, such as a Loan Status Report indicating the maximum mortgage amount that the applicant qualifies, an AUS Approval, and a Program Eligibility Letter.

The homebuyers will also need to participate in an eight-hour homebuyer counseling program. The Homebuyer Agency will issue a certificate to the buyer upon completion. This can be completed while they are searching for a property. The program website, www.yourwayhomeaz.com, provides a feature that enables you to search for eligible foreclosed properties by county or city.

Once you have located a property and are ready to place an offer, Realtors are required to include appropriate language within the purchase contract. Failure to ratify the purchase contract can result in disqualification from the program. The following is a list of some desired contingencies and conditions to be included within the offer:

1. Qualifying and obtaining a first mortgage in the necessary amount

2. Qualifying and obtaining a second mortgage from the Your Way Home AZ Program

3. Appraised value of the property must be sufficient to ensure that the purchase price is no more than 99% of the current market value

4. Seller must provide the program's Certificate of Seller to the buyer with the seller's acceptance of offer

5. Property must meet Minimum Property Standards

6. Property needs to be eligible for a home warranty policy

7. Closing date should be at least 45 days after acceptance to allow enough time to process application and meet all program requirements

The sellers are also required to provide a Seller's Certificate indicating that the sales price represents a discount of at least 1% below the appraised market value.

The Homebuyer Agency will then set up a file for your client to be submitted to the ADOH requesting that program funds be reserved for the applicant. Upon approval from the program, the ADOH will then issue a Commitment reserving the funds. The transaction is then ready to proceed in the customary fashion.

Please contact the Krushinsky Team at 602-695-7575 or david@dkhomeloans.com to answer any questions or to find out if your clients are eligible to qualify for this incentive when looking to purchase a home in Phoenix or surrounding areas.